Judge Lee W. Tsao, Case 22NWCV00928 2023-03-22 Tentative Ruling

Judge: Lee W. Tsao, Case: 22NWCV00928, Date: 2023-03-22 Tentative Ruling

Case Number: 22NWCV00928 Hearing Date: March 22, 2023 Dept: C

TIRADO v. IRVINE AUTO RETAIL II INC.

CASE NO.: 22NWCV00928

HEARING: 03/23/23

TENTATIVE ORDER

Defendant IRVINE AUTO RETAIL II INC.’s Demurrer to Plaintiff’s Complaint is OVERRULED.

Opposing Party to give notice.

No Reply filed as of March 21, 2023.

This “lemon law” action was filed by Plaintiff PALOMA TIRADO (“Plaintiff”) on October 3, 2022. Plaintiff alleges that Defendant IRVINE AUTO RETAIL II INC. (“Defendant” or “Norm Reeves Volkswagen”) negligently repaired Plaintiff’s 2020 Volkswagen Tiguan. (See Complaint §§41-43.)

Plaintiff’s Complaint asserts the following causes of action: (1) Violation of Song-Beverly Act (Breach of Express Warranty); (2) Violation of Song-Beverly Act (Breach of Implied Warranty); and (3) Negligent Repair.

Defendant generally demurs to the third cause of action. Defendant further argues that the third cause of action is barred by the Economic Loss Rule.

Third Cause of Action – Negligent Repair

Defendant argues that Plaintiff’s third cause of action is barred by the economic loss rule. According to Defendant, the economic loss rule generally allows a plaintiff to recover in tort only when a defective product causes either personal injury or damages to property other than the allegedly defective product. (See Robinson Helicopter Co. v. Dana Corp. (2004) 34 Cal.4th 979.)

In Opposition, Plaintiff contends that the negligent repair claim falls within an exception to the Economic Loss Rule under Robinson Helicopter and North American Chemical Co. v. Sup. Ct. (1997) 59 Cal.App.4th 764. Plaintiff argues that the Rule does not apply to claims involving negligent performance of services.

Tort recovery for noninsurance contract breaches is precluded, unless the alleged violation arises form an independent duty founded on the principles of tort law. (Freeman & Mills v. Belcher (1995) 11 Cal.4th 85, 102.) However, an exception to the rule occurs when a party’s contractual obligation creates a legal duty and the breach of that duty supports a tort action. (Robinson Helicopter, supra, 34 Cal.4th at 989.) In such cases, “the duty that gives rise to tort liability is either completely independent of the contract or arises from conduct which is both intentional and intended to harm.” (Erlich v. Menezes (1999) 21 Cal.4th 543, 552.) A tortious breach of contract is found when “(1) the breach is accompanied by a traditional common law tort, such as fraud or conversion; (2) the means used to breach the contract are tortious, involving deceit or coercion or (3) one party intentionally breaches the contract intending or knowing that such a breach will cause severe, unmitigable harm in the form of mental anguish, personal hardship, or substantial consequential damages.” (Id. at 553-554.)

Here, Plaintiff’s negligent repair cause of action is not only a negligence claim, but it is also a breach of warranty claim based on Defendant’s allegedly negligent performance of its repair services. In the Complaint, Plaintiff generally alleges that under the applicable warranties, Defendant owed Plaintiff a duty of care in repairing the Subject Vehicle in accordance with industry standards, Defendant breached that duty by failing to properly repair the Subject Vehicle based on that standard, and as a result, Defendant caused Plaintiff damages. (Complaint ¶¶39-43.)

Plaintiff alleges that Defendant had a contractual duty to repair the Subject Vehicle under warranty, and that the repairs should return the Vehicle to marketability. Therefore, Defendant voluntarily agreed to undertake the repairs by contract, and as such, they were required to exercise that duty with due care in making repairs. Plaintiff alleges that Defendant breached its duty by repeatedly failing to adequately repair the vehicle, which then resulted in damages. As a result, the economic loss rule does not apply, and the allegations sufficiently allege that Defendant breached its duty to effectuate adequate repairs.

The Demurrer is OVERRULED.